A corporation has a taxable income of $2,564,306. At this income level, the federal income rate is 48%, the state tax rate is 22%, and the local tax rate is 12%. If each tax rate is applied to the the total taxable income, the company would have to pay $2,564,306 0.48 in federal taxes. Luckily for the corporation, the taxes paid are deducted as described above. How much is paid in federal taxes if the customary deductions are taken into consideration?

A corporation has a taxable income of $2,564,306. At this income level, the federal income rate is 48%, the state tax rate is 22%, and the local tax rate is 12%. If each tax rate is applied to the the total taxable income, the company would have to pay $2,564,306 0.48 in federal taxes. Luckily for the corporation, the taxes paid are deducted as described above. How much is paid in federal taxes if the customary deductions are taken into consideration?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter2: Financial Statements, Cash Flow,and Taxes

Section: Chapter Questions

Problem 10MC

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